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Nigerian pan-African financial services group headquartered in Lagos, United Bank for Africa Plc (UBA), has joined the Pan-African Payments and Settlement System (PAPSS) that enables instant payments across African borders in local currency.
The PAPSS is a centralised payment and settlement infrastructure for intra-African trade and commerce payments. PAPSS ensures instant or near-instant transfers of funds between originators in one African country and beneficiaries in another.
UBA adds to the growing list of Nigerian and African banks joining the PAPSS network. Wema Bank had also recently inked its PAPSS presence.
UBA’s new partnership with PAPSS allows a seamless rollout of the services in Nigeria, Ghana, Gambia, Sierra Leone, and Liberia.
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The commercial launch of the service occurred in Accra, Ghana, Thursday, January 13, 2022 after a successful pilot in the West African Monetary Zone (WAMZ) covering Gambia, Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone.
The PAPSS is already connecting 42 currencies in Africa. The new deal allows a customer in one African country to pay in their own currency, while a seller in another country receives payment in their own currency.
PAPSS ensures that Africans no longer need to convert local currencies into hard currencies whether US dollars or Euro to effectively curtail the continent’s FOREX loss and save on transaction time in a way that will make inter-Africa trade more cost effective and time driven.
PAPSS is also ending the painful era of having to have additional cost on services or goods payments within as transfer fee, SWIFT or bank charges usually as high as $165 on transactions around $10,000.
According to President of the African Export-Import Bank, (Afreximbank), Benedict Oramah, in an interview with Africa Renewal, “PAPSS is ending “a cumbersome and time-consuming process that costs us [Africans] about $5 billion in [money transfer] charges each year,”
This is How PAPSS works
Sending money using the PAPSS is a five-step process:
1.) The first step is when an individual issues a payment instruction to their local bank or payment service provider.
2.) Second, the bank or the payment service provider sends the instructions to PAPSS.
3.) Third, PAPSS validates the payment instruction.
4.) Fourth, upon successful validation, PAPSS will forward the instruction to the beneficiary’s bank or payment service provider.
5.) Lastly, the bank or payment service provide pays the transferred funds, in local currency, to the beneficiary.
